The Dark Side of Fat Profit Margins

It's natural to worry about what might happen if companies' extraordinarily high profit margins slip. The more troubling thought may be what happens if they don't.

Never before have American companies seen so much of their sales drift down to the bottom line. In 12 months that ended in the second quarter, U.S. after-tax corporate profits as a share of gross domestic product, a measure of profit margins across the entire economy, came to 10.9%, according to the Commerce Department. That was the highest level according to...